A Note From The Editor

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These days, we all need to make the most of our resources, and for most small-business owners, human capital is a primary asset. So how do you inspire people to perform at a higher level?

For most workers, job satisfaction means more than a paycheck, so monetary incentives aren't the answer. Compensation is a satisfier, not a motivator. Our earnings allow us to satisfy our most basic needs for food and shelter, as well as the various luxuries we covet, but human beings need more than that.

According to psychologists, humans have a deep-seated need to feel competent and valued. They need to believe they belong to something larger than themselves. By meeting such innate psychological needs, you can inspire employees to greater heights.

Appealing to these basic needs doesn't have to cost you much of anything--except maybe leaving a little ego at the door. Dictatorship isn't leadership, anyway. Often, being a better leader starts with being a better person. For example:

When employees talk, listen. Be open and responsive. Don't interrupt or shoot down their ideas. Overcome the impulse to dismiss their complaints. Hear them out, investigate their suggestions, and report back with your findings.

Make it a point to applaud good performance. Create a modest recognition program; it doesn't require bonuses. Post an "employee of the month" flyer, reserve a special parking space, or take the person of honor to lunch.

Give credit where credit is due. If someone offers a good idea, attribute it to them, even if you have to modify it before putting it into practice. This will make people feel valued and encourage more independent thinking.

Ask for suggestions on a regular basis. Beyond the fact that people like to be heard, your employees know aspects of your business you've undoubtedly forgotten. You never know where that next good idea will come from.

Delegate. It will not only free you up to focus on what's really important, but it also gives employees a chance to grow and learn. It also demonstrates your confidence in them, and confident employees are creative employees.

Look for qualities to compliment, rather than criticize. When you critique performance, start with the positives and do it in a constructive way.

Don't be mysterious about the business. You employees have a stake in the business, too. Schedule monthly or quarterly status meetings so employees can trust you to keep them in the loop. When you achieve some success--like picking up a big new account--celebrate as a group, even if that just means springing for pizza.

Be truthful when things aren't going well. But be sure to frame the news in a reassuring light. Position it as a learning experience, not a cause for panic.

Create an environment conducive to sharing. Even when it's bad news, make sure employees are comfortable being honest. Instead of placing blame when there's an error, approach problem-solving as a team effort. This is a good way to nip problems in the bud.

Celebrate your employees' personal milestones. This includes birthdays, job anniversaries and the birth of a child. Cupcakes and greeting cards make more of an impression than you may think.

Sometimes the simple things are most effective. By showing respect, you earn respect. And when you make the effort to inspire your employees, you may be pleasantly surprised to find that they return the favor.